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An Investigation Into the Oil and Gas Contractual and Legal Relationship Between the Kurdistan Regional Government (KRG) and the Iraq Federal Government (IFG)

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An Investigation Into the Oil and Gas Contractual and Legal Relationship Between the Kurdistan Regional Government (KRG) and the Iraq Federal Government (IFG) KADIRGOLAM, B. 2020. An investigation into the oil and gas contractual and legal relationship between the Kurdistan Regional Government (KRG) and the Iraq Federal Government (IFG). Robert Gordon University [online], PhD thesis. Available from: https://openair.rgu.ac.uk An investigation into the oil and gas contractual and legal relationship between the Kurdistan Regional Government (KRG) and the Iraq Federal Government (IFG). KADIRGOLAM, B. 2020 The author of this thesis retains the right to be identified as such on any occasion in which content from this thesis is referenced or re-used. The licence under which this thesis is distributed applies to the text and any original images only – re-use of any third-party content must still be cleared with the original copyright holder. This document was downloaded from https://openair.rgu.ac.uk Research title: An Investigation into the Oil and Gas Contractual and Legal Relationship Between the Kurdistan Regional Government (KRG) and the Iraq Federal Government (IFG) Brzoom Kadirgolam (0916445) A thesis submitted in partial fulfilment of the requirements of the Robert Gordon University for the Degree of Doctor of Philosophy April 2020 1 Acknowledgements I would like to express my sincere and deep gratitude to my supervisors, Dr Leon Moller for his continuous support, guidance and great advice and Mr John Kalberg for his support and useful critique which have been essential to complete this thesis. Without their support and guidance, I would not have been able to complete my studies. I would like also to thank the research office team, especially Dr Sarah Christie for her support and encouragement. I would like to thank my wife Niga for her constant moral support and encouragement, and my two small children Paraw and Ahmed, who were always complaining about me being busy with the thesis and not having time for them! I wish to express my appreciation to the interviewees for their participation and contribution to this thesis. Their input is crucial part of the study. I would like to thank whoever supported me by any means in completing my study. This thesis is dedicated to my parents, who guided me through difficult times during my childhood, my sisters Sargul, Chiman and Diman and my older brother Akram, who I am blessed to have. Without their constant support and encouragement, I would not have been able to complete this thesis. Last but not least, my gratitude goes to all my family and friends for their support and guidance. 2 Table of Abbreviations BODC = British Oil Development Company BPC = Basra Petroleum Company CPO = Central Petroleum Organisation ERAP = Enterprise de Racherches et d’Achtivities Petrolieres FCOG = The Federal Council for Oil and Gas FOGL = Federal Oil and Gas Law IFG = Iraqi Federal Government INOC = Iraqi National Oil Company IPC = Iraq Petroleum Company IOC = International Oil Company KRG = Kurdistan Regional Government MPC = Mosul Petroleum Company PSC = Production Sharing Contract SOMO= State Organisation for Marketing of Oil SOOP = State Organization of Oil Projects TPC = Turkey Petroleum Company TSC = Technical Service Contract UN = United Nations 3 Table of Contents CHAPTER 1 INTRODUCTION ...................................................................................... 10 1.1 Introduction ..................................................................................................................... 10 1.2 Overview of the Conflict over the oil and gas resources in Iraq ...................................... 10 1.2.1 De facto Kurdistan Regional Government in 1991 .......................................................... 11 1.2.2 Efforts to resolve the problem ........................................................................................ 14 1.2.3 The legality of the KRG’s PSC........................................................................................... 14 1.2.4 Oil and gas dispute under the Constitution .................................................................... 15 1.3 Aims and Objectives ......................................................................................................... 16 1.4 Research question ............................................................................................................ 17 1.5 Research Methodology .................................................................................................... 17 1.6 Structure of the research thesis ....................................................................................... 18 CHAPTER 2 RESEARCH METHODS AND FINDINGS ....................................... 21 2.1 Introduction ..................................................................................................................... 21 2.2 Research Methods ........................................................................................................... 21 2.2.1 Overview of data collection ..................................................................................... 21 2.2.2. Data collection methods .......................................................................................... 22 2.2.3. Approach to the research development .................................................................. 23 2.2.4. Research strategy ..................................................................................................... 24 2.2.5. Historical events ....................................................................................................... 25 2.2.6 Data sources .................................................................................................................... 26 2.2.7 Archival analysis ............................................................................................................ 26 2.2.8 Interviews ........................................................................................................................ 28 22.9 Problems with primary and secondary data .................................................................... 30 (a) Primary data ....................................................................................................................... 30 (b) Secondary data ................................................................................................................... 31 2.2.10 Final remarks on the research methods ....................................................................... 33 CHAPTER 3 HISTORY OF PETROLEUM OPERATIONS IN IRAQ ............ 35 3.1 Introduction............................................................................................................................ 35 3.2 The search for oil in Mesopotamia ........................................................................................ 37 3.3 The Turkish Petroleum Company (TPC) ................................................................................. 42 3.4 Post WWI negotiation for oil concession in Iraq .................................................................... 43 4 3.5 Dispute between the United States of America and the TPC shareholders over Iraqi oil ..... 47 3.6 Iraq Petroleum Company (IPC) ............................................................................................... 49 Figure (6) ...................................................................................................................................... 51 3.7 British Oil Development Company (BODC) ............................................................................ 51 3.8 The nationalist movement and its impact on oil agreements in Iraq .................................... 53 3.9 Road to nationalisation .......................................................................................................... 54 3.9.1 Abdul-Karim Qasim and the oil concession between 1958 and 1963 ............................ 54 3.9.2 Nationalisation of Iraqi oil ............................................................................................... 56 3.9.3 Law No. 69 of 1972: Nationalising the operations of the Iraq Petroleum Company Limited ...................................................................................................................................... 59 3.10 Conclusion ............................................................................................................................ 63 CHAPTER 4 THE OWNERSHIP OF OIL AND GAS IN IRAQ ......................... 65 4.1 Introduction ........................................................................................................................ 65 4.2 Dispute between the KRG and the IFG over oil and gas ownership ................................ 65 4.2.1 The Disputed Connotational Provisions ......................................................................... 66 4.3 Ownership of Oil and Gas in General ..................................................................................... 68 4.3.1 Legal concept of oil and gas ownership ......................................................................... 69 4.3.2 The concept of ownership Under Islamic Sharia law ..................................................... 70 4. 3. 3 Absolute ownership ...................................................................................................... 71 4.3.4 The rule of capture .......................................................................................................... 72 4.3.5 Non-qualified ownership theory ....................................................................................
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